In the world of bookkeeping and accounting, it’s common for firms to focus their efforts on the business-to-business (B2B) model. Serving commercial clients is typically more lucrative than working with individuals. And B2B bookkeeping and accounting allows us the chance to develop our own niche area of expertise where we become specialists. Bookkeeping and accounting professionals have built strong firms through their focus in every industry–from construction to hospitality, medical, legal, and beyond. If an industry exists, there’s a niche bookkeeping and accounting practice out there to serve it.
But what if your firm’s niche was serving other firms?
In a cutthroat profession, it can be hard to imagine letting “the competition” in your front door, much less deep into the back office. Yet that’s exactly what Capovario and The Profit Constructors do, and we’ve found the model beneficial for everyone involved.
What is the co-firming model of partnership?
Simply put, working F2F or “co-firming” gives clients the power and expertise of two firms for the price of one. Working F2F is designed to build an environment that’s inclusive and collaborative in every aspect, from client communication to workflows and beyond. To be effective, this requires two firms willing to share their processes with each other, communicate with clients that some or all of the work may be outsourced, and staking reputations on the belief that both firms have the expertise to complete the work as needed.
If you’ve never done this, or if you’ve attempted it and been burned, the idea can be truly terrifying. We get it. We’ve been there. It takes the right firms with the right leadership, the right relationships, and the right clients. But we’re here to tell you that when it works, it really works.
Co-firming arrangements are a win for clients
Peanut butter is amazing on its own, while jelly is the best thing to happen to sliced bread, since sliced bread, of course. When you put them together, you get something new and incredible.
Like this culinary match made in heaven that’s a classic example of a whole being more than the sum of its parts, F2F partnerships put two teams with different sets of expertise together to provide a greater client experience than either could do alone. And the combinations are endless! Just like there’s peanut butter and banana, nutella and banana, or peanut butter and honey, there are a number of different flavor combinations you can make when you put two firms together. The way Capovario and The Profit Constructors work together is just one example of inter-firm cooperation.
“F2F partnerships put two teams with different sets of expertise together to provide a greater client experience than either could do alone.”
Of course, a partnership like this doesn’t just happen. It takes a lot of intentional effort, groundwork, communication, and an alignment between firm leaders. It’s also worth mentioning that each firm won’t always be doing equal amounts of work. On a daily, weekly, or monthly basis, one firm may be shouldering more than the other. That’s to be expected and accounted for in setting up the partnership. And when it works, clients have the expertise of two top service providers and the partnering firms benefit from leveraging each others’ strengths where they have weaknesses or gaps.
How does co-firming help each firm grow?
Firm-to-firm partnerships are more than referring business and more than collaborating on a limited basis. When both firms make the decision to join forces and become known as a dream-team that works tirelessly to exceed client expectations, both firms reap the rewards.
The reality of a co-firming relationship is somewhat of an unofficial merger. Not a legal consolidation, but a mind-meld between the leaders and staff of each firm. Two firms work as one, augmenting their individual capabilities with those of their partner. When this leads to better client outcomes and satisfaction, it inevitably leads to more referrals, more business, and more growth for each firm in the partnership.
The co-firming relationship in action
You’re probably thinking this sounds great in theory, but wondering how it’s possible to put into action. How can two firms work together with one voice? Can leadership and staff put aside their egos and work solely in the best interest of their shared clients? How can your competitor become your partner?
The truth is, creating an F2F partnership can be easier than you’d imagine, but can also be a disaster if not done correctly. Over the last year, both of our firm have successfully designed and implemented a successful co-firming relationship.
This came about because we each had wants and needs we saw in the other’s ability to fulfill. While The Profit Constructors had a reputation as a top firm serving the construction industry and wanted to be able to take on more business, the firm had no appetite for hiring more employees. At the same time, Capovario was in a different place, excited about hiring and looking for ways to add value with its skilled team.
As members of the Roundtable Labs community, the two firms’ owners already knew the value of collaboration. With the help of a friendly third party, we came together and designed a way to work together, grow together, and flow in such a way that it would surprise and delight our joint clients as they were getting services from two of the best firms in the profession.
Keys to making a co-firming work
Today, client satisfaction is higher than ever, productivity is exceptional, and both firms are growing revenue month-over-month and year-over-year.
How did we do it? Here are some of the most important tips for success if you’re considering engaging in an F2F partnership:
Set clear expectations prior to finalizing the relationship, and put it in writing–no unwritten assumptions!
Choose an outside partner, such as a business coach, to help make sure everything is laid out from the start. This objective party should ask all the hard questions, leave no stone unturned, and explore every “what if” scenario before the partnership begins.
Decide where the buck stops in different circumstances. Who is ultimately in charge and in which situations? Are there any exceptions to the rules?
Define roles and responsibilities for each firm. Who’s responsible for setting client expectations or reporting back to the client if there are problems?
Make a plan for resolving disagreements between firm owners or conflicts between staff. Who is the tie breaker if there’s a stalemate?
Decide which firm’s tech stack to use or make a plan to combine solutions, integrate, or purchase new solutions that work better than either firm’s existing ones.
Determine how revenue will flow between firms. Will one firm collect from the client and sub-contract to the other firm, or will the client pay a portion of their total fee to each firm?
Talk about whether you want this to be a short-term or long-term partnership. Perhaps a trial basis with one client makes sense before diving into a larger agreement.
Talk about how you’ll present the partnership to clients. Will one firm white label the services of the other? Will the second firm be named in any engagement letters? How will client communications be handled? Will we be using consistent email addresses and the appearance of uniformity?
At the end of the day, both firms’ reputations are on the line. A successful co-firming arrangement can create opportunities and major growth for everyone, but it can drag both firms down if done poorly. Creating this type of partnership shouldn’t be taken lightly, and it’s extremely important to partner with a firm that shares your vision and values.
To hear more about the Roundtable Labs “Collaboration Without Competition” philosophy, make sure to attend our session at QuickBooks Connect 2022 (Dec. 7 at 3 p.m. PT, and again on Dec. 9 at 10 a.m. PT) featuring Richard Roppa-Roberts of Roundtable Labs, Alexis Sadler of Accounting Therapy Inc., and Angela Main Roberts of Main Accounting Services.
Editor’s note: Tonya Schulte co-authored this article.